Comparative Analysis of Components of Nigeria’s 2023 Budgetary Allocations: A Budget of Fiscal Sustainability and Transition

Abstract

This paper conducted a comparative analysis of components of Nigeria’s 2023 budgetary allocations termed budget of fiscal sustainability and transition proxied by fiscal (FS) sustainability (i.e) proxy to sustainable economy, Oil production (OP), debt services (DS), average exchange rate (AEXR) and inflation rate (INFR). Auto-regressive distributed lag (ARDL) technique was adopted for the analysis. The study discovered that that debt service had positively impact on fiscal sustainability in Nigeria. Debt servicing has significant impact on the fiscal sustainability because of its positive relationship with GDP, while exchange rate had negative significant relation to fiscal sustainability. The paper recommended that the allocation amount or value should be adjusted based on the inflation rate. Priority should be given to key sectors of the economy such as agriculture and manufacturing sectors and sectional allocations based on ethnic group mostly on infrastructural provisions should be avoided to ensure even distribution and provision of infrastructure in the country.